1. Professional Judgment
New Aid Officer Workshop 2018

2. Professional Judgment
It’s Your Decision!

3. What is Professional Judgment?
Section 479A in the HEA authorizes us to use PJ

4. Examples of PJ Situations
Adjusting Cost of Attendance components
Adjusting data elements used to calculate EFC
Direct changes to EFC is not permitted
Performing a Dependency Override
Establishing eligibility for a dependent student to receive Federal Direct Unsubsidized loans if parent refuses to complete FAFSA and support student

5. Elements that CAN be Adjusted
AGI
Wages Earned
Taxes Paid
Number in Household
Number in College
Additional Financial Information
Untaxed Income
Asset information
Dislocated Worker Status
Federal Benefit Programs (i.e.- SNAP, WIC, TANF, etc.)
Dependency Status
Only for dependent to independent

6. First Rule of PJ is… DOCUMENT!
Keep in mind that all special circumstances must be verified first to ensure you start with accurate data
Types of documents you may wish to collect
Tax returns
W2s
Last pay stubs
3rd party documents
Legal documents
Letter from employers
AVG – 75: You must complete verification for a selected student before you exercise professional judgment to adjust any values that are used to calculate the EFC. But making a PJ adjustment does not require you to verify an application that isn’t selected. Institution’s preference to verify students who are not selected by ED ; however, ensure this is documented within institution’s policies and procedures.
If a student is not selected and data elements are change, must ensure is coded as a PJ to prevent CPS from selecting the student for verification.
AVG-82 When professional judgment (PJ) is used (and coded correctly) to adjust an application that is not selected for verification, the CPS prevents the subsequent transaction from being selected for verification.

7. Loss of Income and/or Additional Expenses

8. How could some of these factors affect a student’s EFC?
Types of Income Losses
Losses of Income
Unemployment or income reduction
Death of parent/spouse
Divorce of parent/student
Loss of child support
One-time lump sum payout
See GEN-09-04
Additional Expenses
Extended family support
Such as nursing home expenses
Unusual medical/dental expenses that exceed 11% of the IPA
Unusual non- discretionary debt that exceeds 12% of the IPA
Private school costs for children in elementary or high school
Please refer to your institution’s policy for handling judgments related to Private school cost.
Private school cost- there is wide range of opinion about considering this cost due this cost can be considered as discretionary. Situations where family has no choice – religious school or medical, emotional, physical, or perhaps academic program reasons.
How could some of these factors affect a student’s EFC?

9. Medical Expenses Example
Hands on example:
Let’s say you have a dependent student whose parents experienced an annual medical expense totaling $5,000. The student has 4 in the household and 1 in college. How would you calculate how much of the $5,000 exceeds the 11% of the IPA?
$26,290*11%= $ then $5000-$ = $ is the amount you will remove from the AGI listed on the FAFSA

10. Dependency Overrides & Unsubsidized Stafford Eligibility
Authority given for dependency overrides HEA Section 480(d)

11. Dependency Overrides
Any student who answers “No” to all the dependency questions is dependent even if student is self-supporting
Students who have extenuating circumstances can request an FAA to consider a dependency override
Requires documentation to the validity of the extenuating circumstances
Personal statement
Letters from professionals
Remember: DOCUMENT, DOCUMENT, DOCUMENT!
CCRAA- must re-evaluate the following year
Per CCRAA, Schools have the authority to accept the dependency override that was performed and approved by another school without additional documentation.

12. Dependency Overrides Factors to consider Abandonment by parents
Unable to locate a parent after reasonable attempts
Situations of abuse
Abuse- threatens the student’s health and safety

13. Dependency Overrides
None of the following examples merit a dependency override:
Parents refuse to contribute to the student's education
Parents are unwilling to provide information on the FAFSA or for verification
Parents do not claim student as a dependent for income tax purposes
Student demonstrates total self-sufficiency

14. You be the Judge…
Laura is a first-time freshman living with her grandparents. She is not under legal guardianship, but she has been living with her grandparents since she was 5 when her father left the country. Her mother died when she was 2. She has had no contact with her father since she was 5 and neither has her grandparents, although he sent a check out of the blue when she turned 18 for $5,000.
Would you consider Laura independent?
Why or why not?
AVG-116
A third party that knows the student’s situation—such as a teacher, counselor, medical authority, member of the clergy, prison administrator, government agency, or court—should establish the unusual circumstances. Evidence can be a signed letter or an official document, such as a court order. If third party documentation is truly not available, the school may—though it is not required to—accept a signed and dated statement from the student or a family member detailing the unusual circumstances. Such a statement should be a last resort.

15. Federal Direct Unsubsidized Loan Eligibility
FAAs may use professional judgment to determine if a dependent student may be offered Federal Direct Unsubsidized loans without parental data on the FAFSA
To do this, FAAs must verify:
Parent no longer provides financial support
Parent refuses to file the FAFSA
FAA must collect a signed statement from the parent affirming the above while also certifying that they will not provide support in the future (Include the date support ended.)
FYI - If the parents refuse to sign and date a statement to this effect, you must get documentation from a third party (the student himself is not sufficient), such as a teacher, counselor, cleric, or court.

16. Cost of Attendance Adjustments
Budgets, budgets, budgets!

17. Standard COA Components
Tuition & Fees
Books & Supplies
Room & Board
Transportation
Personal Expenses

18. Types of Adjustments to Consider
Additional mortgage/rent charges
Unusual car repair or transportation costs
Dependent care costs
Computer/Laptop expenses
Unusual medical/dental expenses not covered by insurance
Cost need to occur during the award year
LTHT Budgets- cannot have personal cost such as computer/laptop expense – would not recommend making an adjustment

19. What you CANNOT do in a PJ
A PJ is award year specific and cannot carry forward from year to year unless subsequent request & documentation are received
You cannot directly change an EFC
You cannot make changes to the EFC formula
You may not establish automatic categories of special circumstances. All PJ must be conducted on a case by case basis.
PJ cannot be used to circumvent the law
PJ cannot be used to waive student eligibility requirements
PJ cannot make an Independent student dependent

20. What would you do…
Jan’s father works for an oil and gas company selling equipment. His salary is primarily commission based. Her mother is a homemaker. Based on the 2016 tax return information, Jan’s family AGI was $187,500 resulting in a higher EFC than they feel they can afford. Jan submits an appeal requesting a professional judgement based on the tax return, which shows her father earned less commission than in 2016 and a family AGI of $153,000. The family requests you use their 2017 tax return instead.
Discuss whether or not you would approve this appeal and why.

21. Wrapping Up
Understanding the complexity of the EFC makes you an effective FAA!
You have the authority to use professional judgment, so use it (with proper documentation)

22. Questions? Kimberly Schwaeble Rice University ks56@rice.edu